An Overview of Merchant Processing Services

 

Whether you have an online business or a regular brick and mortar store, offering your customers the option to pay by card is crucial. That is why you need a merchant processing service partner. Merchant processing is an important service for businesses, enabling them to process both debit and credit card payments from customers. Choosing the right service provider is just as important as choosing the right service.

How Exactly Does Merchant Processing Work?

When a customer hits the ‘pay now’ or ‘buy’ button on your website (or when you swipe the credit or debit card over the counter), an authorization request is sent to your merchant processing service provider. The provider then forwards the authorization request to the issuing bank or the credit card association for approval. Included in this request is relevant data such as the card number, expiration date and CVV number.

Next, the issuing bank or the card association sends back an approval or decline message to the merchant processor. According the response received, the merchant processing agent conveys the message to you and your customer to validate whether the transaction has been approved or declined. The payment for the transaction is deposited into your merchant account, minus the service charges for processing the transaction.

All of this is automated, secure and occurs within minutes, making it incredibly convenient for both your customer and your business.

Things to Consider When Choosing a Merchant Processing Service Provider

The bank card processing industry is complex and ever changing. With so many merchant services providers clamoring to be the best in the business, it can be difficult to know who to choose. Make sure to keep the following in mind when choosing a merchant processing firm to partner with.

Does the Provider offer all the Services you need?

Your needs are unique to your business and you need a provider that can work with you to meet all of them. For instance, if you have an online business, you need a provider that offers a secure payment gateway and virtual terminal, and one that also specializes in risk management. However, offline stores have completely different requirements, so choose a company that meets all your specific needs.

What are the Service Charges?

Though it is not recommended to always opt for the ‘cheapest’ service provider, cost is an important factor while considering merchant processing firms. We suggest not focusing on how much you are being charged, but focus instead on what exactly you are being charged for. Some companies do offer certain value added services at an extra cost. If your service provider is up-front about all charges, and can satisfactorily answer all of your questions, it may still be worth paying the (slightly) elevated service fees.

Merchant processing service is important for businesses, so make sure you choose your provider wisely! Don’t forget, our Payscout specialists are always here to answer any questions you might have, contact us online or call us direct at 888.689-6088.

Managed Risk Merchant Services – “What You Can Expect”

Offering your customers the option to pay via credit or debit card can be a crucial step for your business. Especially when it comes to doing business online, as paying with a debit or credit card is the only option a customer has. Many third party payments providers will offer credit card processing as part of their merchant processing services, but there can be a catch.

While these services are readily available to lower risk businesses, businesses with higher risks – or a managed risk model – can find it difficult to get the support they need to open a merchant account. This is due to the fact managed risk merchant services are only offered by specialized service providers, like Payscout.

Since Payscout has such a long history of partnering and supporting higher risk businesses, we thought it would be helpful to provide answers to some of the most common questions you may have about managed risk payment services.

Is your business type considered managed risk?

As a general rule, you will qualify as a managed risk merchant if your business type is classified within the financial industry as having a “higher level of managed risk.” This means you either serve an unpredictable clientele or accept only online transactions where the actual card and cardholder are not present to authorize. It could also mean your transaction turnover is high with large volumes of sales. These factors tend to lead to enhanced risk for card fraud, which is what the providers are looking for when they evaluate eligibility. Small companies with low volume sales can also be considered managed risk businesses, because they typically can’t afford to make an investment in fraud screening tools, like the larger companies can.

It is not just the type of industry or size that can cause a business to be defined as managed risk. The individual owner’s reputation is equally as important when determining risk status. Business owners with poor/inconsistent credit histories, or those that have been blacklisted, are considered to be a higher risk than those with good standings.

Does your merchant services provider want you to provide a rolling reserve?

Most service providers will want a reserve of some kind to protect their interest, so keep that in mind. Make sure you understand the terms of your contract and it is important to feel confident about your relationship with whatever merchant services provider you choose. They will play a large role in the success of your business.

What should I look for in a managed risk merchant services partner?

Merchants with managed risk models often have to search a little more to find a merchant provider that will board them as an account and also provide them with the excellent service they deserve. For this reason, the process of finding the right managed risk merchant services provider is important. The right merchant services provider can make or break your business down the road, so looking for a provider that is the best fit for you is worth the time.

Also, since managed risk merchant services fees are typically higher than those charged for low-risk businesses, it’s important to review proposed contracts and rates carefully. Some merchant service providers can take fees to an extreme, charging extra to set-up accounts on top of standard processing fees.

Moreover, it can be difficult for managed risk merchants to negotiate the terms of their credit card processing, due to the fact they have less leveraging power. However, the pros of enabling debit and credit card payments for your business will generally outweigh all the cons, so we encourage you to keep looking until you find a provider you feel comfortable with. Just remember to thoroughly read your contract and keep an eye out for extras like termination fees or other incidentals.

When choosing a managed risk merchant services provider, there are many things you can do to ensure you find the right partner:

  1. Ask around and choose a provider with a well established reputation in the field and one that is well spoken of for the range and quality of services offered.
  2. Choose someone who caters to your specific needs. For instance, depending on the nature of your business, you may require 24×7 customer service support.
  3. Insist on a breakdown of the fee structure. Don’t sign-up unless you are convinced the fee structure is fair and clear.

Below, we’ve listed a few of the managed risk business types Payscout supports:

  • Pharmaceutical products
  • Travel services
  • Telemarketing businesses
  • E-wallet and E-cash
  • ISP and hosting services
  • Online cigarette or tobacco vending
  • Online auctions and debt services
  • Online dating services
  • Online sale of replica products

Setting up a managed risk merchant account can be overwhelming. Payscout has a team of managed risk specialists standing by to talk to you about your unique business needs and help you find the perfect blend of services and price. Give us a call at 888-689-6088 or inquire online today!

Merchant Account Basics

If you want to accept credit or debit card transactions as a business, you will need to have a merchant account. Merchant accounts are a business arrangement between you and a credit card processor that allows you to accept card-based payments from your customers. Those payments are then deposited into your bank account by the credit card processor after the sales are complete.

There are two basic types of merchant account; one for card-present transactions and one for card-not-present transactions. A merchant account for card-present transactions is used when the credit card and cardholder are physically present at the time of the sale and the card is swiped through a credit card terminal, or via a mobile card-swipe device. A merchant account for card-not-present transactions is used when neither the card nor the cardholder are present for the sale, as is typical in eCommerce sales.

You will have to get an application approved by a credit card processer in order to get a merchant account. The processer outfits you with the products and services you need to accept card-based transactions, including hardware and software.

The credit card processor acts as a middleman between you and the issuing bank. When the bank authorizes a customer’s transaction, the transaction amount is credited to your merchant account by the processor. At the end of the day, you settle all of your transactions in one batch with the processor, who deposits the funds into your bank account typically within two days.

By partnering with a credit card processer like Payscout, you will never again have to turn away business, because you can’t accept card payments. You also get to enjoy the benefits of working with an international company while still receiving dedicated attention, honest dealing, and genuine appreciation from the Payscout team. We’ll treat your business with respect and professionalism, setting up your service quickly, with ready support every step of the way.

Check out our website for more information on merchant accounts or contact our helpful, live customer service representative at 888-689-6088 to address any questions you may have!

Tips for Avoiding Credit Card Fraud

 

Fraud is one of the major issues faced by many credit card owners today. Millions of dollars are lost to credit card fraud each year, with no sign of this trend decreasing. High profile security breaches on organizations like Target and T-Mobile prove that even companies that invest in the best security possible can fall victim to theft and fraud.

So, how can an everyday person protect their identity and prevent fraud? There may be no surefire way to prevent credit card fraud, but there are certainly steps you can take to protect yourself. Try following these three tips to cut down on your chances of falling victim to credit card fraud.

1. Keep Your Card Secured

This might seem obvious, but many people fall victim to fraud after first falling victim to theft. Never leave your credit cards in a place that could be accessed by thieves, like in a desk drawer or in your car’s glove box. Remember, a thief does not need your pin number to withdraw money from an ATM using your credit card, and they can ring up a big bill buying things online. It is best to keep your credit card on your person, either in your wallet or purse, at all times to keep it out of the hands of potential thieves.

2. Don’t Share Your Credit Card Information

The golden rule in avoiding credit card fraud is to not share your credit card information with anyone. It is extremely easy to shop online, and providing online retailers with your credit card information has almost become second nature to some. However, you need to be careful about who you shop with. Make sure you are using a legitimate merchant site and check the website’s credibility before you buy. You also should be cautious about providing your information over the phone, as telephone scams are rampant. Remember, if a deal sounds too good to be true, it usually is.

3. Review Your Billing Statements

There are times when credit card thieves withdraw small amounts of cash from many different bank accounts hoping that their victims never notice the discrepancy. That is why it is so important to review your monthly bank and credit card statements, and equally as important to report any spending you do not remember or have no record of.

A Look at Small Business Finance Accounts

When you open up a small business, part of the process includes making a decision about how you will deposit money and settle your bills. This can also include figuring out how to process credit card payments. For most businesses, this means opening up two types of accounts; a merchant account to handle credit and debit card transactions and a conventional bank account to handle cash deposits and bill payments.

What is a Merchant Account?

Essentially, a merchant account is a contract between a retailer and a bank or credit card processing firm. This type of account serves as an intermediary between the concerned parties. The retailer and banks that sponsor credit and debit cards perform transactions by using a merchant account.

Many merchant account providers also provide mobile processing of debit and credit cards. With this service, you can easily accept payments from your customers from anywhere at any time!

Merchant accounts require you to pay a fee for every transaction made with a credit card. Fees will be charged for transactions such as sales processing and funds transferring. However, in comparison with the amount of new sales you are able to make by accepting credit cards, these fees won’t impact your overall profits.

Merchant Account vs. Bank Account

A traditional bank account serves as a repository for your company’s funds, which can include credit card and cash payments. A bank account is the main source of funds used to settle your bills and payroll. It is also the account that your merchant account deposits the profits from credit and debit card sales into.

In order to properly do business, you will need to partner with a credit card processor that can work with your bank to keep your cash flow up-to-date. As an international company, Payscout can work with your local bank as well as international processors like Europay, MasterCard and Visa to ensure your transaction data is secure and current.

Check out our website or call one of our customer service specialists at 888-689-6088 to find out how we can help you grow your business!

How to Avoid Merchant Account Scams

Merchant account scams are a relatively new form of cybercrime. However, the number of scams impacting the U.S. and abroad are growing rapidly. This simply means that business owners accepting debit and credit card payments and process through a merchant account need to take the necessary steps to protect themselves from becoming victims. Some merchant account scams are specifically targeting businesses that work with debit and credit card processing businesses to process the transactions for their customers.

These particular types of scams have the ability to target both the physical store and online marketplace. These scams are specially designed to get credit and identity information about the businesses and their clients. It is a good thing that there are ways to prevent yourself from becoming the target of a merchant account scam. Businesses should take the following steps to secure their data, and protect their employees, money and customers:

  • Research before you sign a contract: New businesses are usually the primary targets of scams, because they are generally less educated about the merchant account fee process. This allows scammers posing as legitimate merchant account providers to take advantage of them. So, do your homework before signing with a merchant services provider! Check with your local Better Business Bureau to see if they are a legitimately registered business.
  • Trust in peer reviews: Before signing with a merchant services provider, check out their reputation online. Go through their complaints records, status of services and consumer reports. Check their online reviews as well. Do their customers seem happy with them? You should also keep an eye on a company’s social media accounts as people frequently post complaints against companies on their social media accounts versus a website.
  • Compare charges: You should compare every transaction charge on charge statements against the transactions in your financial business records. This ensures that the charged amount and time of each transaction lines up with what is in your personal records. Doing this on a regular basis will help you keep informed about your account and will enable you to catch inaccuracies quickly.

There are many different types of scams that can be applied to merchant accounts. We’ve compiled a short list of the most popular scams to help you recognize them:

  • Partial scam – The most common partial scam is the ‘hidden fee’ scam where concealed fees, rates and extra charges (usually applied by the processing bank), suddenly pop-up, or remain hidden and unaccounted for until the eCommerce merchant receives the bill from the processing bank.
  • Full-scale scam – A full-scale scam is where a merchant applies for a merchant account with a provider that doesn’t actually exist. After filling in a surprisingly short membership form, merchants will get an expensive bill with a high deposit rate in order to suck the maximum amount of money out of the merchant without raising suspicion. After getting the merchant’s money, the scam provider will simply disappear. Emails go unanswered, websites are erased and telephone lines are disconnected. Merchants unlucky enough to fall for this scam will most likely never see their money again.
  • Backdoor scam – A backdoor scam involves changing the program code of a gateway in order to provide a backdoor (hole) for a third-party scammer to connect to later on, when the gateway is in use.

You can prevent falling victim to a merchant account scam simply by working with a credible merchant services provider such as Payscout. Check us out online or contact one of our customer service specialists at 888-689-6088 to find out how we will partner with you to help you securely grow your business.